The OGM Interactive Canada Edition - Summer 2024 - Read Now!
View Past Issues
OUR GREAT MINDS
OUR GREAT MINDS
One thousand years ago, the Norwegian Vikings ventured into the unforgiving mighty Atlantic Ocean to find new lands. As fate would have it, they discovered the Great Northern Peninsula of the island of Newfoundland. With a similar coastline, fishing, hunting and gathering, the Vikings must have felt very much at home in Newfoundland and Labrador.
Today, we can see the remnants of the timber-sod homes made by the Vikings, nestled into the shores of Lance-aux-Meadows, Newfoundland.
Time and time again throughout history, it seems we have connected with Norway. They have been our oceanic counterparts and colleagues, and we have learned from each other for centuries.
Live-ability is a cultural discourse. It means, to live in harmony in your environment with a sense of purpose of work and contribution. It is also the ability to have financial stability, a high level of connection to nature and the people around you.
While we all have different definitions of what makes a perfect place to live, you cannot argue with the fact that for decades now, Norway has gotten full marks across the board in terms of health care, quality of work and life, and the happiness factor. How did they get there?
It is said that our suffering often becomes our greatest teacher and so it was for Norway. During the second world war, Norway was brought to its knees. A decimated country they were forced to re-imagine a new way of life.
Through a national visionary plan, the Norwegians found the silver lining from the war. This resulted in a unified state which has proven to be spectacularly beneficial to the Norwegian way of life.
From war, the Norwegians learned quickly, that surviving was not enough. Thriving meant approaching resources from a position of strength. As a result, Norway built state-directed processes and protocols that not only made the country one of the most successful offshore oil and gas regions on earth, they are also the largest cultivator and exporter of Salmon in the world and have a multitude of other booming industry sectors emphasizing marine and coastal community success.
Norway has a code of social behaviour that emphasizes living with modesty, the collective in mind, and with social equality. One person is no better than the other and they define national success by everyone succeeding. The Norwegians clearly understand that a rising tide lifts all boats.
In 1969 oil was discovered on the Norwegian continental shelf. Quickly Norway aligned themselves with policy, management and procedures that would ensure the entire country benefitted from the resource which ultimately led to the extreme wealth and prosperity they have today. This contrasts with Canada’s free-market approach where the market determines the pace and scope of development of our resources. Norway’s model has proven to be far more successful.
In 2012 the Norwegian Petroleum Directorate was formed to create the greatest possible value from oil and gas for Norway’s people. The Government Pension Fund was established for surplus oil revenues which is now the world’s largest sovereign wealth fund.
Before Covid-19 hit, 2019 saw Norway’s $1.1 trillion wealth fund have the greatest increase in value in a single year in the fund’s history. The Government Pension Fund in 2019, returned a whopping $34,000 for each person in Norway. Today the overall value of the fund is equivalent to over $200,000 for every person in the country. That’s the power of taking control of their natural resources.
The Government Pension Fund currently holds stakes in over 9000 companies globally making Norway a global shareholder of 1.5% of all listed stocks on the planet. With a focus on Apple and Microsoft stocks, the fund also diversified with investments in bonds and real estate. Those investments are paying off.
Norway’s resource-focused mindset and peak performance commitment have produced; a booming industry, jobs, research, and logistics. If they can do it, so can we.
The province of Newfoundland and Labrador doesn’t have to reinvent the wheel, but rather learn from Norway and adopt the Norwegian state-focused mindset to the province. If we did, it could mean a booming economy and a sustainable future. It could mean business thriving. It could mean a growing and contributing population. It could be the place where our youth would want to stay and raise their families. It could mean the opportunity for young Newfoundlanders and Labradorean’s to make their way back home from other places around the globe.
There is no reason why Canada and indeed Newfoundland and Labrador cannot follow Norway’s lead. We have just about every comparable resource that Norway has.
Newfoundland and Labrador provide a unique, majestic, once-in-a-lifetime coastal experience, with varied cultural assets. The scenery here is unprecedented. You can take pictures of an iceberg in April and be swimming with whales in July. It is truly remarkable.
Norway and Newfoundland have similar geographic and industrial opportunities, yet Norway prospers while Newfoundland and Labrador have consistently walked the poverty line. That is a sad reality whereby the stark contrast should no longer be acceptable.
Where does Newfoundland and Labrador fare in the ‘Livability’ equation today?
How about Canada?
While we may think we are modern, liberal and ahead of the game here in Canada, according to the “Human Development Report,” Canada is not even in the top ten best countries in the world to live.
Newfoundland and Labrador is being controlled by a complicated federal system that is believed to be free and democratic. The reality is, there is nothing democratic or free about poverty.
Rather than being state-owned and prosperous like Norway, we are at the mercy of policy whims and changing central governments. Sadly, this province is left without a steadfast, focused, unified, national plan that works.
A large part of Norway’s success can be attributed to its unitary government system. Effective decision making has promoted coordinated state action at the right times with the right organizational model.
In 1972, the visionary Norwegian government founded Statoil ASA, an integrated petroleum company, which by 2012 provided dividends from government shares worth $2.4-billion.
Today, Equinor is the global energy company which spun out of Statoil ASA. Equinor energizes 170 million people every day with operations in over 30 countries. This energy company specializes in oil and gas, renewables, carbon capture and hydrogen and is the foundation for Norway’s energy success.
The structure of the country’s oil and gas assets include three foundational considerations:
The foundation of Norway’s petroleum industry success is grounded on these three pillars working in unison. This strategic model allows for an abundance of Norwegian shareholder revenues, royalties, taxes, a booming supply sector, development of harbour bases, coastal development and this, in turn, ignites other sectors such as aquaculture and tourism in Norway’s coastal communities.
Failure is not an option for Norway. As a result of maximizing natural resources, building coastal communities and with all levels of resource development supported, there are no loopholes for failure. There are no opposing governments or wasted time in blame and opposing views. They simply get on with it.
By all accounts, this is the way forward for Newfoundland and Labrador. If we had majority ownership in our oil and gas projects and were in control of development and energy distribution, we would align with the vision of our Norwegian counterparts. Why not? They have already proven it to be successful.
Like Norway, Newfoundland and Labrador has the opportunity to be a world-class leader in, not only oil and gas but also renewable energy, the fishery, aquaculture, tourism and a cross-section of leading digital technologies. We are suppliers of everything from; oil to European markets, to Nickel for Elon Musk’s new vehicles, not to mention Verafin has proven that we are world-class, cybersecurity experts.
We do have it all in Newfoundland and Labrador. Making it come to fruition is a matter of developing our resource-rich province to its full potential.
Imagine if our coastal ports, harbours, and outlets were developed like Norway. We could transform sleeping communities into strategic shipping ports and supply bases that supporting oil and gas operations and other marine industries. We are strategically situated amid global shipping lanes and we must tap into powerful and obvious opportunities. Imagine what we are currently losing out on, because of unclear, timid and unambitious policy leadership.
Imagine great fishing ports from our rich past such as Fermeuse Harbour being tapped once again to service new industries plus revitalized fishing efforts. Such obvious provincial assets must become world-class destinations because of their obvious strategic proximity to offshore fields, global shipping lanes and established fishing interests. Why is it not our very top priority to promote developments to create lasting competitive advantages for our province?
The Norwegian model would have seen the development of a unique port such as Fermeuse Harbour decades ago. Indeed, they have developed over a dozen Fermeuse Harbours since the 1960s. Their forethought has provided urban/rural balance and the most cost-effective and flexible industrial marine supply bases on the planet. These farsighted approaches have supported their amazing industrial growth and it is why they are currently per capita the richest nation on earth.
If Hibernia has taught us anything, it is that our offshore projects are bigger, more profitable and more successful than originally thought. And that has happened time and time again with our offshore projects including Terra Nova, White Rose and Hebron.
So, the question beckons, what are we waiting for? It’s not risky to invest in our resources. Rather it lacks vision and intelligence, not to.
Norway has a comparatively similar hotbed of offshore oil plays, similar ocean water temperatures, similar fish stocks, fishing grounds and fish populations, similar petroleum formations, and similar seismic revealing massive oil potential at sea. Therefore, not taking a chance on being the primary investor in our oil projects, given what history has shown us, is counterproductive and leaves us at the mercy of constant oil price swings and haphazard outside investment.
Over the last thirty years, the current model of Newfoundland and Labrador’s offshore oil development has proven to be marginally effective.
Are we going to settle for ‘marginal’?
Norway’s majority oil shares in their offshore projects put them in direct control of operations, profits, environmental approvals, tax benefits, jobs and the overall, long-term success of the nation. It is a model that’s been so successful that they have the largest trust fund in the world at well over a $TRILLION.
With this trust fund as a foundation, Norway will most likely succeed at anything and just about everything they do. Everything from RENEWABLE energy, global investing and local country developments is what they have to look forward to. In Norway, doing anything less would be considered short-sighted and a losing proposition for the collective.
Norway as a country with 5 million people has been visionary with its natural resources. As a result, they are living with security, debt-free, and they now have a steady diet of opportunities to succeed. They are grounded in equality, appreciation and the simple things in life.
Newfoundland and Labrador have been in such a mindset of ‘lack’ that we would take a short-term job in exchange for our future. This goes for the individual as well as our local businesses. We have so much to lose that we are paralyzed. Rather than recognize and confront these realities we blame the last group in political power. This is getting so predictable and so old. What’s worse, it’s costing us our prosperity, security and our happiness day-to-day.
We use the reasoning that Canada has to come to the table to ensure Newfoundland and Labrador’s energy resources are developed. Indeed, Canada does. And indeed, Canada should. If Canada can’t see the bridge from oil and gas to new energy then that short-sightedness is a reason for everyone to demand the future we deserve.
It is time for the visionaries and the action-takers to come to the table with a National development strategy that reaps the rewards of our natural resources for all Canadians. We do not drop fossil fuels for a low carbon economy, to later find out that new energy is not the perfect answer we had hoped. The way forward is to develop our resources, meet global energy demand and ensure that we have the revenues needed to address climate change with the highest level of action.
Like Norway, we can care for the environment and as we transition to a new energy mix. Oil and gas are the bridge to new energy. Anything less will create havoc for our future. Norway who is successful in oil and gas production and emission control has shown us that it’s not one or the other, it’s both. Norway has a massive oil and gas windfall and has prudent financial profit structures in play. This has secured its future.
This is a call to all Canadians. Much like the devastating impact of war on Norway, Covid-19 has brought us to our knees as a nation. Norway has shown us what is possible when it comes to rebuilding a country with precision and vision. We can learn from them and use this opportunity to build unity and collaboration in our government.
It’s a new year and a new start. We can use this time for restructuring and hope. We can use this time to build a nation that is powerful and sustainable; one fit to leave to our children and oil and gas is the foundation for all of that.
Did you enjoy this article?
You May Also Enjoy...
Greek Steel Meets Norwegian Innovation in Historic Wind Energy Alliance
Norway’s Oil and Gas Venture: Billions at Stake as Future Production Hangs in the Balance
Unleashing the Potential of Newfoundland and Labrador: A Vision for the Future
Offshore Wind Contracts Are Vital for Our Province of Newfoundland and Labrador
Breaking News: Argentia Marine Terminal Expansion Gets Green Light from Government
